IAZI Report October 2026: How much income is still enough to buy?

Price development is slowing down

The Zurich real estate service provider IAZI has published the figures for the third quarter in its market update from October 7, 2026. Condominiums became 3.9 percent more expensive year-over-year and 0.8 percent more expensive quarter-over-quarter. Single-family homes rose by 2.8 percent compared to the previous year and by 0.7 percent compared to the previous quarter. Investment properties posted the strongest growth at 4.5 percent on an annual basis. The numbers confirm the trend of recent quarters: Prices are rising, but more slowly than at the start of the interest rate cycle.

This development does not contradict the frequently expressed expectation of a market slowdown; it rather clarifies it. Demand has stabilized, but the market still has too little supply to put downward pressure on prices. The vacancy rate has been lower for the sixth year in a row, reaching a historic low of 0.9 percent. Of the roughly 45,000 vacant residential properties nationwide, only just under 11,000 belong to the owner-occupied housing market.

Affordability remains the bottleneck

More interesting than the price direction is the question of who can still afford to buy today. The banks' notional affordability calculation remains the decisive filter. The rule of thumb: Ongoing housing costs including a notional interest rate of 5 percent, incidental costs of one percent of the loan value, and an indirect amortization up to a two-thirds loan-to-value ratio must not exceed one third of gross income. At current price levels, this leads to significant minimum income requirements.

For a classic condominium in Zurich with a market value of 1.5 million francs, this means: With 20 percent equity and a mortgage of 1.2 million francs, the notional interest costs amount to 60,000 francs, incidental costs to 15,000 francs, and indirect amortization to around 10,000 francs. In total, this equals 85,000 francs in housing costs per year, which requires a gross income of at least 255,000 francs. In Basel or Lausanne, the requirements for comparable properties are about 15 to 25 percent lower, and in Bern somewhat lower still.

What the current price increases actually mean

The 3.9 percent annual increase for condominiums sounds moderate, but in absolute terms it requires additional means. For a property worth 1 million francs, that's about 39,000 francs more purchase price, which in turn means around 7,800 francs more equity and correspondingly higher ongoing financing costs. For households with a narrow income surplus, such a development already shifts the boundary between affordability and rejection.

The effect becomes even more pronounced with a mortgage that exceeds the two-thirds loan-to-value guideline. In that case, banks require linear amortization over fifteen years. Every additional 100,000 francs of mortgage above the two-thirds threshold increases the annual amortization burden by around 6,700 francs. For many buyers in urban areas, this is a key reason why the path to home ownership remains difficult despite historically low interest rates.

Regional differences are increasing

The data increasingly shows diverging submarkets. While in Zurich and on Lake Zurich demand still dictates the price, isolated price declines can be seen in peripheral regions. In eastern Swiss agglomerations like Wil, Frauenfeld, or Chur, properties are at times being sold below asking price again. Buyers with professional flexibility or home office arrangements gain more bargaining power here.

A two-tier dynamic is also evident in western Switzerland. Greater Geneva remains expensive, aside from individual price corrections in the luxury segment. The Vaud Riviera and the Valais, by contrast, are benefiting from stable immigration and second-home demand. The price differences between center and suburbs have thus grown further, shaping the regional spread of affordability.

Mortgage volumes and financing situation

The volume of outstanding mortgage loans in Switzerland has continued to grow, even though growth has slowed according to IAZI. According to the National Bank, total volume is around 1,074 billion francs—a new record high. For the banks, the mortgage business remains the most important source of income, albeit with increasing risk awareness. Several large institutions have tightened their internal guidelines and now allow fewer exceptions for affordability than two years ago.

Mortgage conditions remain favorable. Depending on the provider, SARON products are just above one percent, while ten-year fixed-rate mortgages are around 1.70 percent. These conditions are historically low, but the notional stress test at 5 percent remains unchanged. What's crucial for affordability is not the market yield curve, but the model-based interest rate scenario calculated by the bank.

What prospective buyers can do now

Anyone exploring home ownership should start working with their own figures early and honestly. The first step is a clean affordability calculation with a buffer. Anyone currently just above the income threshold should consider alternatives, such as moving to a more affordable region, opting for a smaller property, increasing equity through early withdrawal from the pension fund or pillar 3a, or joint financing with a partner, parents, or siblings.

For buyers with specific offers, a structured comparison of several banks is worthwhile. For larger volumes, the differences in ten-year fixed-rate mortgage conditions often reach 20 to 40 basis points, which adds up to several tens of thousands of francs in interest differences over the term. As the IAZI report puts it soberly: Prices are rising more slowly, but access to home ownership remains above all a matter of income structure.